The Lullaby Cry

Downside probe?

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Good morning and welcome back to the snoozy attack. Yesterday's bruise halted the ruse of the bovine attempt at ursine abuse. "I had Boo on the ropes," said Hoofy the mope,"but when push came to shove, it was me who got groped." Will the bears finally get cut some slack or can Hoofy get things back on track? It's a brand new day in the city of critters so power on up and shake those jitters!

While there was something that just didn't feel right during the Hump day session, selling strength has been a losing proposition this year. As a matter of fact, the current zing from the March fling has yet to see a 10% correction. While that fact, in and of itself, makes the Minx more vulnerable to shocks or spills, it has lulled the world into a false sense of security. In the process, the bears have been beaten into submission in every way, shape and form. When they faded rallies, there was no dip to cover. When they pressed (the brief) weakness, Doctor Snapper administered an equity enema. It's gotten to the point that most shorties have just stopped trying.

It's entirely too early to pen an equity epitaph but I wanna share what I'm seeing. As it stands, we're "officially" basing above support (prior resistance) and the bulls have earned the benefit of the doubt. Hoofy will point to the relatively tight corporate bond market, an upswing in the economy, friendly trends and an accommodative Elmer. That's just what is and, for better or for worse, the only thing that will change that psychology is lower prices.

The stealth bear case is more of an art than a science. The trifecta of Fibonacci, Elliot Wave and DeMark analysis continues to point to a fairly substantial topping process. These can obviously be off the mark at times but they've lined up (for now) and warrant respect. Factoring in the lazy attitude among investors, silly low vols, record insider sales, yada, yada, yada and, well, it's almost spooky scary. As I believe a gut check is a matter of when (rather than if), the question becomes one of timing--particularly with baby new year dustin' off the tux.

We power up this morning to find Europe Mixed, the Jinx a bit higher, gold a few shekels lower and the Minx slinking through our range. While this morning's economic data was a tad light, the real focus will be tonight's Intel (INTC:NASD) spell and tomorrow's orange crop report. Cisco (CSCO:NASD) is also worth a mention as mother Merrill upgraded the networker. Watch this name as a tech tell as we edge through the day.

Finally, the new phonebooks are here, the new phonebooks are here! Check out the holiday gift baskets that have just arrived in Main Street. When you care enough to send the very best, send some love from the critters! It makes a great stocking stuffer and will give your menorah some major moxie! Just point and click to do the trick!

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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